CL Educate IPO subscribed 1.89 times on the last day

New Delhi, March 23 -- The initial public offering (IPO) of education services provider CL Educate Ltd was fully subscribed on the last day of the sale on Wednesday, while that of home improvement products retailer Shankara Building Products Ltd achieved a 51% subscription on the first day of the share sale.
CL Educate, backed by private equity firm Gaja Capital, was subscribed 1.89 times by 6 pm on the final day, stock exchange data showed.
The portion reserved for qualified institutional buyers (QIBs) was subscribed 3.66 times, while that for retail investors was subscribed 1.6 times. The portion meant for non-institutional investors saw a subscription of just 21%.
CL Educate raised about Rs72 crore from anchor investors, including DSP Blackrock MicroCap Fund, Sundaram Mutual Fund, Canara HSBC, Oriental Bank of Commerce, Life Insurance Co. Ltd and ICICI Lombard General Insurance Co, ahead of the IPO last week.
A price band of Rs500-502 a share was fixed for the IPO, which opened on Monday.
At the upper end of the price band, the company is expected to raise Rs239 crore.
CL Educate is selling 2.18 million new shares to raise Rs109.4 crore, while promoters and investors are selling around 2.57 million shares worth around Rs129.5 crore.
The offer comes at a time when many of the key stocks in the education sector are sharply down from their record highs as investors become wary of high debt and dwindling profits.
The company plans to use proceeds of the issue for acquisitions and other strategic initiatives, repayment of loans, funding working capital requirements and other general corporate purposes, according to its draft documents.
Kotak Mahindra Capital Co. Ltd is the lead manager for the offer.
CL Educate's business includes test preparation and training services under its Career Launcher brand as well as publishing and content development. The company also runs vocational training programmes and operates K-12 schools under the Indus World Schools brand.
Meanwhile, the IPO of Shankara Building Products, an organized retailer of home improvement and building products, was subscribed 51% on the first day of the offer, data from the stock exchanges showed.
While QIBs did not bid at all, non-institutional investors bid for less than 1% of the portion reserved for them. However, the portion for retail investors was almost fully subscribed, receiving bids for about 98.5%.
The Bengaluru-based company, backed by Fairwinds Private Equity, has fixed a price band of Rs440-460 per share for the IPO. At the upper end of the band, the overall size of the offering is about Rs345 crore.
Shankara is divesting 25% of its total equity shares in the IPO which closes on 24 March.
Fairwinds, which has had a 34.78% stake in the company, had invested Rs80 crore in 2011. Shankara Building plans to use Rs38 crore to retire debt and the rest for general corporate purposes.
The IPO comprises a fresh issue of shares worth Rs50 crore and an offer for sale of nearly 1 million shares by managing director Sukumar Srinivas and 5.7 million shares by Fairwinds.
Ahead of its three-day share sale, the company raised Rs103.50 crore ($15.8 million) by selling shares to anchor investors including Ashoka Pte, the investment arm of Singapore-based Flowering Tree Investment Management, Nomura Singapore, an Asia fund of HSBC Global Investment Fund, and Franklin India.